Late payment can have a crippling effect on small firms and we've been campaigning against the practise of companies delaying payment to their suppliers for many years.
The Late Payment of Commercial Debts Act
was introduced in 1998, which granted businesses the right to claim interest on late payments
. However, the legislation did not provide a solution for many businesses and we therefore continue to name and shame businesses which make retrospective changes to payment terms, effectively squeezing their suppliers. We also lobby for businesses to sign up to the Prompt Payment Code
To enter a company into the Hall of Shame anonymously, email us at PublicAffairs@fpb.org
, including any relevant background information and copies of letters/emails.
The most recent companies to be entered into the Hall of Shame are:
High street fashion retailer Monsoon Accessorize has been placed in the Hall of Shame for increasing payment times from 60 to 90 days.
The retailer has also informed new suppliers they will be subject to a mandatory 4% supplier invoice discount. If suppliers want to be paid more quickly, the retailer is demanding an extra 10% discount for payment within 7 to 10 days of goods received, or 5% for payment within 30 days.
Pharmaceutical giant GlaxoSmithKline has been named and shamed by the Forum of Private Business for increasing supplier payment times from 60 days to as much as 95, depending on the date invoices are received.
The company – the world's fourth largest pharmaceutical producer – is part way through informing its suppliers of the changes.
Supermarket giant Sainsbury's has been entered into the Hall of Shame after stretching its payment terms to 75 days.
The grocer, which announced a profit increase in May of more than 7%, has written to all its non-food suppliers, with no consultation, to warn payment times will rise from 30 days to 75.
The letter from Sainsbury's said the move was prompted by their own research which suggested their original payment terms were outside industry standard – effectively too generous.
While the Forum disputes this point, it also argues that slow payment practice among other companies is no excuse for Sainsbury's to squeeze their suppliers, many of who are small businesses.
The organisation's Chief Executive Phil Orford has written to Sainsbury's urging the firm to reverse its decision and sign up to the Prompt Payment Code, signatories of which agree to treat suppliers with respect and not to change payment terms retrospectively.
Brewing giant Molson Coors, which is behind beer brands such as Carling, Cobra and Grolsch, has been entered into the Hall of Shame after stretching its payment terms to over 90 days.
The UK brewer recently wrote to its suppliers informing them that, from September 2010, their invoices would not be processed until the Monday after the 90th day of receipt.
This means small businesses working for Molson Coors can expect to wait more than three months before being paid for their goods and services.
In a letter to its suppliers, Molson Coors blamed the move on the need to invest and said extending payment terms would make the company "more consistent with the industry standard".
But the Forum argues that bad payment practice among other companies is no excuse for big businesses to squeeze their suppliers. Forum Chief Executive Phil Orford has written to Molson Coors urging the firm to reverse its decision and sign up to the Prompt Payment Code.
Dell Inc, one of the world's leading information technology companies, has been entered into the Hall of Shame after informing its suppliers of its intention to increase invoice payment times by 15 days.
In a letter the company said it was standardizing its payment terms across its supplier partners' by extending payment times from 50 to 65 days.
Dell told recipients that they were each a valued Dell supplier' and that it wanted to make them aware of the changes.
But the letter is typical of the communications that are normally involved when a big company decides to increase its payment terms giving smaller suppliers very little room to refuse or negotiate.
Other companies which have been named and shamed over the years: